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Industry views: loyalty rewards – baby, please don’t go

Having customers is good. Having repeat customers is better. But loyalty is a tricky business, especially as consumers are bombarded with offers, deals and rewards. What’s driving today’s loyalty strategies? We asked loyalty experts to talk about strategies that work to engage customers and what new approaches have the greatest potential.

Question 1: How are you helping partners improve their loyalty strategies?

To improve channel and employee loyalty, Aimia has developed a methodology rooted in historical program data and current business trends. Aimia’s Cornerstones of Engagement include the elements of rules, rewards, communications and technology, all rooted in meaningful analytics. To build a sustainable and impactful incentive program, companies must start with end goals in mind. We work with our clients to develop a program that will accomplish business goals and engage their audiences.

Loyalty now involves so much more than simply accumulating points. It’s about end-user experience and overall engagement. Working with our partners, our products now include real-time notifications, along with “My Account” and in-app services. Digital developments have been key to this and have helped us offer frictionless approaches for both gift and reward programs. Digital drives enhanced capability to engage with customers based on their behavior, then rewards them in a personalized and relevant method, such as real-time vouchers and offers.

—Tessa Unsworth, chief commercial officer, PrePay Solutions

Cachet’s Select Mobile Money platform helps our clients increase cardholder loyalty by providing a suite of high-value, on-the-go banking services that position the prepaid card and app as integral to the everyday lives of their cardholders. The mobile platform also provides a valuable two-way communication channel that enables a higher level of engagement. Our clients can use the platform’s powerful analytics and marketing tools to track cardholder behavior inside the app and send highly personalized in-app messages, targeted marketing offers and location-based rewards. Cardholders receive reward balance notifications as well as timely alerts about rewards earned as they are entering the store or location where the reward was earned. By empowering prepaid providers with a robust mobile engagement tool, we’ve helped them increase retention by as much as 150 percent.

We identify the middle ground between transaction and full-blown loyalty (i.e., Starbucks) for our customers and their consumers. I like to call that middle ground “transactional loyalty.” Retailers should focus on driving multiple visits that result in a meaningful reward and increase those visits with smart offers that are delivered strategically. Many retailers and manufacturers want to drive incremental behavior over time, but it may not be realistic for customers to engage with a complex portal or receive three emails a day. For example, I know our average customer buys every 45 days, so we pitch them at 30 days with a compelling offer. Smart, high-value rewards combined with urgency can influence ongoing behavior in a more relevant and meaningful way. We accomplish this by offering our clients a mix of the right solutions: trackable rebates, redemption offers, loyalty platforms and rewards.

Through personalization. Gartner predicts that, by 2018, organizations that excel in personalization will outsell companies that don’t by 20 percent. Consumers interact with brands differently than they did even a few years ago— including how they research, interact with, and purchase products and services. Everything is both personal and public. Businesses also are more equipped to respond and most have gobs of data and insights on key customer segments and on each individual buyer. The brands that know what to do with all that information will most certainly win. Traditional loyalty programs were good at incentivizing purchase, but not at impacting long-term behavior. That’s where Arroweye gets involved. To actually drive loyalty, we help our partners make their programs both timely and personal by delivering individual offers that respond to real-time shopping and purchase behavior, and we can put them in consumers’ hands in a matter of days.

—Render Dahiya CEO, Arroweye Solutions Inc.

Question 2. What innovations in loyalty have the greatest potential?

Mobile promotions have great potential. Retailers can stand out in a digital environment by fully integrating rebates and loyalty platforms into the mobile ecosystem. Today, we can engage customers on their phones, validate their purchases with easy mobile claiming and deliver virtual rewards that are provisioned to a wallet. Tapping into this technology can separate a retailer’s rebate and loyalty program from the rest.

Consumers want compelling experiences that are relevant to them to stay brand-loyal, and they expect their rewards programs to keep up. With multiple ways to earn and redeem rewards—even with competitors—and faster ways to earn, issuers have to be nimble and think creatively to keep their best customers in the fold. With consumers demanding more flexible perks than ever, i2c anticipates continued digital delivery and redemption of coupons and rewards across mobile devices, including connected cars and IoT. At the same time, social environments also will continue to thrive, with the expectation of ways to earn, share and redeem fully integrated in the experience.

A processing platform that takes into account personal preferences, purchasing history, external contextual information at that moment, like geo-location, will become more and more important for issuers to deliver on the promise of relevant, timely and meaningful offers. Also, look for broader consumer adoption of wallets with expansion to retail issuance, all supported by innovations in secure encryption and tokenization technologies and EMV. We support customers with a responsive and configurable payments processing platform that helps issuers cope with the pace of innovation and stay relevant to their best customers.

—Ginger Sayor, vice president of global product marketing, i2c Inc.

From a marketer’s perspective, innovation must reinforce the brand or program and, thus, innovations that enhance the brand and its image have the most potential. Technology solutions may disintermediate a brand’s image or message, so SVM, with our acquisition of 1to1 Card, is innovating by reinventing both physical and virtual open-loop cards and carriers, enabling marketers to keep their brand image front and center with program participants. When custom open-loop prepaid cards are mailed or emailed directly to participants using either a branded card carrier package or a branded message template, the marketer’s brand continues to be reinforced during the card activation process and again each time the award card is used or balances are checked, creating valuable marketing impressions. On average we find that each custom award card can create more than seven separate marketing impressions for each recipient, so maximizing these impressions for the benefit of our clients is of utmost importance.

—Marshall Reavis, CEO, SVM

IDC Research studies have shown that there is a direct correlation between personalization and customer loyalty. IDC further reports that 30 percent of consumers said that personalization improves shopping, while 27 percent said it makes products seem more relevant to their interests and individual tastes. Beacon technology is an innovation with great potential to deliver on the consumer’s appetite for personalization. How it works is simple. As a customer walks into and around a store, beacons communicate wirelessly with mobile apps on smartphones over Bluetooth. This allows retailers to identify consumers, make personalized offers and give rewards. With nearly 4.5 million beacon deployments estimated by 2018, this technology may open up the possibility for merchants to accelerate loyalty and sales. At Verifone, we look forward to working with more partners and retailers to test different beacon programs and continue to push the envelope of this technology.

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